Drugmakers Astellas, Amgen to pay $125 million in U.S. charity kickback probe

BOSTON (Reuters) - Two drugmakers will pay nearly $125 million to resolve claims they used charities that help cover Medicare patients’ out-of-pocket drug costs as a way to pay kickbacks aimed at encouraging the use of their high-priced medications, the U.S. Justice Department said on Thursday.

FILE PHOTO: The headquarters of Japanese pharmaceutical company Astellas Pharma Inc. is seen in Tokyo July 17, 2009. REUTERS/Stringer

The department said Japan-based Astellas Pharma and Amgen Inc, the world’s largest biotechnology company, were the latest to settle claims stemming from an industry-wide probe of drugmakers’ financial support of patient assistance charities.

Astellas will pay $100 million while Amgen will pay $24.75 million, the department said. Neither company admitted wrongdoing.

Amgen in a statement said it did not agree that its conduct was inappropriate but settled to put the matter behind it. Astellas also said it believed its actions were lawful.

The investigation, led by the U.S. Attorney’s Office in Boston, came amid growing attention to soaring U.S. drug prices. Copays are partly meant to serve as a check on healthcare expenses by exposing patients to some of a medicine’s cost.

Drug companies are prohibited from subsidizing copayments for patients enrolled in the government’s Medicare healthcare program for those aged 65 and older. Companies may donate to non-profits providing copay assistance as long as they are independent.

But the government alleged the drugmakers used such charities as conduits to improperly pay the copay obligations of Medicare patients using their drugs, in violation of the Anti-Kickback Statute.

The government alleged that Astellas from 2013 to 2014 while selling the prostate cancer drug Xtandi arranged to have two foundations run funds that would only cover co-pays for patients using androgen receptor inhibitors.

Xtandi at the time was the only major drug used to treat advanced castration resistant prostate cancer from that class of medicines, the government alleged, and Astellas was the only donor to both funds.

The charities were Patient Access Network (PAN) Foundation and Chronic Disease Fund, which is now known as Good Days. PAN said the case involved issues that occurred under its prior leadership. Good Days did not respond to requests for comment.

The government also alleged Amgen from 2011 to 2014 used PAN Foundation as a conduit to pay the copay obligations of Medicare patients using its secondary hyperparathyroidism treatment Sensipar.

The department said Onyx Pharmaceuticals, which Amgen acquired in 2013, also used Chronic Disease Fund as a means to improperly pay the out-of-pocket costs of Medicare patients using its multiple myeloma drug Kyprolis.

Reporting by Nate Raymond in Boston; Editing by Meredith Mazzilli and Bill Berkrot